Brent Saunders: Yes, no, that’s a great question. So, margin expansion is a critical part of our long-term strategy, right? We want to deliver sustained margin improvement for the next several years. And I think we’re set up to do just exactly that, but as you mentioned, right, product mix is a big part of improving margin. The operational excellence we’ve been talking about for the last few quarters, critical, and obviously cost discipline. When you think about 2024, remember it is our largest launch here in the history of the company. And so, let’s just take the example you mentioned, Miebo, right? Sam guided for around $95 million in sales from Miebo. Our investment is significantly higher than the $95 million, significant.
And so, as that pharmaceutical, you tend to invest around two to three years, and then they become vastly profitable. So, we have a direct line of sight of extensive margin improvement over the next few years, but you’ve got to set up these products to realize their potential. Now, directly to your question, Craig, if we have upside, would we drop it through? I think we would like to do that. The only hesitation I have there is if we believe we can change the trajectory of the curve on a product like Miebo, you’d probably want to do that as an investor. You’d probably want to set that up for higher peak sales because we have it for a long time, and it can drive massive growth and profitability with the right investment. That being said, I think we’ve made a massive investment.
We have a great plan. We’re tracking KPIs on a daily, weekly, monthly and quarterly basis. We make the investment decisions based on performance. We don’t just turn over that investment and say good luck. It’s gated and it’s done with stage gates based on hitting KPIs. So, we’re going to watch that carefully. But yes, I think all things being equal, we would try to drop a greater performance all the way through the P&L.
CraigBijou: Great. Thanks for that, Brent. And maybe as a follow-up on some of your comments on the contact lenses and that business, just wanted to get your perspective on what seems like a pretty strong underlying market, and maybe comments on how pricing looks there in 2024 and your positioning within that market and just any other trends that you’re seeing there.
Brent Saunders: Yes, so you’re right, the contact lens market globally is very healthy, growing around 7%, 8%. So, really good trends, good demographics, a lot of tailwinds in that business, and a lot of reason to like contact lens as a category. I think if you looked at our performance and you tried to normalize for Lynchburg, we’re growing slightly faster than market. And I already gave you the great performance on INFUSE or Ultra daily or daily SiHy. And there’s a lot to be excited about in that category. Now, the trends there remain the same, a big shift to daily silicon hydrogels. As we complete the rollout of the full line of INFUSE, we have the multifocal in several key markets. We’ve got to continue launching that around the world.
We have the Toric coming, and then we have the multifocal Toric coming. So, a lot of work, a lot of new launches within that brand over the next, let’s say 12, 18 months. So, feel pretty good about it. Pricing, look, I think there are pricing opportunities in that market. When you look at the fourth quarter, there was a lot of rebating by our competitors. We did not participate in that, given our Lynchburg situation and the launch mode of INFUSE. But we look at it very closely. We look at all the trends and we do make strategic pricing decisions, particularly on perhaps some of the older products. But the new products right now, it’s about building share, pricing appropriately and building share. And I think we have a very strong strategy there.
So, we’re thoughtful of that, in other words.
CraigBijou: Thanks for taking the questions, guys.
Operator: The next question is from Larry Biegelsen with Wells Fargo.
Larry Biegelsen: Good morning. Thanks for taking the question and congratulations on a strong finish to the year here, Brent, and Sam. Love to start with Miebo. Brent, could you talk about the adoption so far? What’s going well? Where do you see opportunities to improve, such as payer coverage? And how are you feeling about the peak sales of $350 million that you laid out recently? Could you exceed that? Then I had one follow-up.
Brent Saunders: Sure. So, I think when you look at Miebo, what you like is the initial target, as you would in any launch, was against high prescribed and dry eye ECPs, right, eye care professionals. And I think the team did a really good job, and the excitement among that community was strong and remains strong. And their experience with Miebo with patients has been excellent, right? And the reason that is you look at refill rates, which are trending way above dry eye category refill rates. So, that means early KPIs are the experienced dry eye ECPs love the product, and their patients love it even more in refill. So, that’s part of thesis of why you’re going to make such a massive investment in Miebo in 2024 is because there’s a lot to like there.
